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The U.S. stock market has taken a new turn as Nasdaq has set a new record high. This increase is mainly due to a recent surge in Apple and Microsoft shares.
The U.S. stock market is showing impressive signs of recovery as the Nasdaq closed at a record closing high. The Nasdaq Composite (INDEXNASDAQ: .IXIC) hit the record after stock futures added gains of 1.4% on Wednesday evening. The Nasdaq, the Dow Jones (INDEXDJX: .DJI), and the S&P 500 (INDEXSP: .INX) all rose, pushed higher by increases in Apple Inc (NASDAQ: AAPL) and Microsoft Corporation (NASDAQ: MSFT).
Along with Apple and Microsoft, the Nasdaq also showed increases in Amazon.com Inc (NASDAQ: AMZN), Facebook Inc (NASDAQ: FB), and Netflix Inc (NASDAQ: NFLX). Other tech firms such as Tesla Inc (NASDAQ: TSLA), Zoom Video Communications Inc (NASDAQ: ZM), eBay Inc (NASDAQ: EBAY), PayPal Holdings Inc (NASDAQ: PYPL), and Nvidia Corporation (NASDAQ: NVDA) also increased.
Marko Kolanovic, a JPMorgan strategist, said in a note on Wednesday:
“We do recognize that bond-like and secular growth stocks (e.g., mega-cap tech, indices such as Nasdaq 100) are already at new all-time highs. Crowding in these stocks indeed reached elevated levels. This is in part the result of long-short trades where portfolio managers are buying mega-cap tech and momentum stocks while shorting smaller cyclical and value stocks.”
Nasdaq Hits Record High
According to MarketWatch, Nasdaq added 148.61 points and closed at 10,492.50 representing a 1.44% increase from its previous close. In the last five days, Nasdaq has increased by 3.33%, with year-to-date gains at 16.94%. In its previous trading session, figures dangled between 10.494.64 and 10,350.96 at its highest and lowest points respectively.
The United States keeps recording more coronavirus cases, as there are presently over 3 million confirmed cases. Regardless of the persisting pandemic, there was a rebound in the service sector in June. This has encouraged investors to continue funding the market.
The chief market economist at Spartan Capital Securities in New York said:
“The market continues to ignore the potential consequences of these spikes in new coronavirus cases.”
However, he believes that the market is overbought. Stating the rise in the prices of gold, he added:
“While I don’t expect this market to crash…I think investors at this juncture are playing with fire.”
In a recent conversation with CNBC, James Bullard, the President of St. Louis Federal Reserve Bank, expressed confidence in the US economy. He believes that the economy is getting better and unemployment will likely reduce to about 7% by the end of 2020.
Other Stock Records
The Dow Jones Industrial Average (DIJA) closed at 29,067.28 on Wednesday after a previous close at 25,890.18. The close shows that DIJA upped 177.10 to 0.68%. In the past five days, the DIJA increased by 1.29% but has incurred a year-to-date loss of 8.66%
Similarly, the S&P 500 also pulled in some gain. After a previous close of 3,145.32, it climbed 0.78% and closed at 3,169.94. Regardless of the gain, the S&P 500 has lost 1.88% in 2020. According to Refinitiv data, the S&P 500 companies may see a 44% year-on-year decline in quarterly earnings.